Pensions, the INPS disaster (well explained)

The annual report Inps of 2023 contains a very long list reported in 1,021 pages of property real estate that simply they are not used by the institute for its own activities and are not …

Pensions, the INPS disaster (well explained)

The annual report Inps of 2023 contains a very long list reported in 1,021 pages of property real estate that simply they are not used by the institute for its own activities and are not even rented to others, for example to private individuals. There are approximately 16 thousand out of 26 thousand in total.

As highlighted by Construction Confederation, the properties are present in almost all the provinces of the country and cover the various cadastral typologies. There is land, even of considerable size, exceeding ten thousand square metres, unused, many unused warehouses, often next to the local INPS offices, and then the commercial premises, even more than 100 square meters large and in rather attractive areas, like via Pacini in Milan, not far from Lambrate station. The assets also include, but are more often left unused, cellars, attics, garages, both in small and large municipalities, as well as offices, 1,437, a portion of which is neither rented nor used directly.

I am data that give rise to concernand are also destined to produce further alarm if attention were to be paid to the fact that the social security institution manages to balance its accounts with difficulty, only with substantial injections of state funds, more than 169 billion according to the budget estimate for 2024. Without these, the revenue from contributions, 247.6 billion, would not even be enough for the payment of pensions alone, which cost 323.5 billion.

Identifying the causes of such a dramatic situation, which represents a considerable burden for citizens and the state budget, is not simple, even if, upon closer inspection, the decisive role cannot fail to be attributed to social security system implanted in Italy for well over a century now. This is entrusted to a public body, the INPS, which is managed bureaucratically and operates under a monopoly regime. For many years, especially starting after the Second World War and until the end of the 1980s, it was the subject of generously expansionist political interventions in social security benefits. They followed the guidelines of the extension of insurance coverage to all categories of workers, the introduction of the minimum integration for social security benefits and subsequently the regulation of social pensionan increase in the amount of benefits and less rigor for access to the various schemes.

From the 1990s to the dawn of the pension alarm launched in the past by many parties, various reforms followed one another, starting with the Amato reform of ’92, moving on to the one promoted by Dini in 1995 and gradually up to the Fornero reform, voted by the coalition of parties that supported the Monti government, then superseded by Quota 102 and then by Quota 100 and other modifications. In the intentions of the promoters, the reform interventions have always been aimed at rationalizing and containing pension spending, through – in short – the introduction of a different calculation of pensions, with extension of the method contributoryin place of the salary one, the gradual increase in the retirement age, a different pension indexation mechanism and other ancillary interventions, including the increase in contributions.

However, no reform affected the original structure of the apparatus, which remained unchanged. In fact, the pay-as-you-go financing method, according to which the contributions paid every year by active workers are used to pay the pensions of retired workers, i.e. pensioners, has not been changed, nor has the form of social security management changed in monopoly regime by the public administration (INPS). Well, such a system, anchored to the “myth of social justice” and to redistributive and coercive mechanisms, has widely revealed its limits, which today have become even more evident, so much so as to make it unsustainable and close to inevitable collapse.

To this end, it has led, on the one hand, the decline in the fertility rate and the increase in life expectancy, with the consequence that fewer and fewer workers can support pensioners, unless further buffer measures are adopted to increase both taxes and the retirement age even more disproportionately; on the other, together with a reduced rate of economic growth, the disproportionate growth of social security spendingwhich today represents the heaviest item in the state budget.

A further reason for criticality, but certainly not secondary, is constituted by the chronic inefficiency and from the costs of the public monopolistic management of social security, which bureaucratically provides services that one is obliged to purchase en bloc, towards a fee that varies according to the person and based on choices made at a political level, and excludes liability a priori of the consumer and his freedom of choice. Furthermore, its results have no monetary value nor can they be controlled via the calculation economicunlike what is essential for private companies operating in the market, which typically have the pursuit of profit.

Add to what has been said, that in an attempt to keep costs under control, national social security management has become increasingly politicised and hostage to the mentality of due demand.

To get out of the crisis, avoiding the collapse and generational conflict that looms, it is not questionable that it is necessary first of all to intervene with liberalization of the social security sector, which would remove it from the public monopoly and hand it over to private managers operating in the market and in competition with each other, ready to satisfy the needs and protection needs of individual consumers. These, with their choices, would decree the success or failure of the initiatives undertaken by the aforementioned private managers, for whom the results of their activities would have monetary value and be controlled through economic calculation. It is then necessary to abandon the current pay-as-you-go system, which, beyond its now consolidated redistributive purposes, also represents a hybrid, which “is in no case an insurance program in which individuals’ payments purchase equivalent actuarial benefits” , but «it is the combination of a particular tax and a particular transfer program» (Milton Friedman).

In its place it is necessary to introduce the different method of capitalization financing on a private basis, which is instead centered on individual responsibility and the investment of savings private, and does not involve coercive transfers from one individual to another. Its operation means that the contributions paid by each individual are not used to pay for the services of those who have stopped working, but are set aside in a fund (or invested by the manager); upon retirement (or even before that time), the amount of contributions paid, revalued according to the result of the investments, is paid to the individual in the form of a pension benefit or, possibly, in a lump sum. The reserves set aside also act as a guarantee for future services, whereas in a distribution system, managed through the public monopoly, fulfillment cannot be said to be certain, as well as being difficult to insure, and is solely left to the coercive levies of the State. is also on Whatsapp. Simply click here to subscribe to the channel and always be updated (free).